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FOX Business After the Bell

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Us 18, Motorola 8, Craig Barrett 7, U.s. 5, Google 5, Johnson 4, United States 4, Kyle Harrington 3, Beth Mooney 3, Intel 3, Sandisk 3, Dell 3, S&p 3, Adam 3, Tom Hanks 2, Ibm 2, Obama 1, Cleveland 1, Melissa Francis 1, Patrick 1,
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  FOX Business    FOX Business After the Bell    News/Business. Stock  
   market updates. New.  

    October 18, 2012
    4:00 - 5:00pm EDT  

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loss of 8% after google's big drop today. let's look at q q q which is down 1% with google making 6.3% of this exchange traded fund which is apple and microsoft. the technology edf dropped today and also hold a 6% stake in google so whether everybody else had a good they didn't matter. google brought it down. dave: look at the vix because the volatility index, all of the stuff that has been going on, you go on marketwatch and see stories about a 1987 like crash, 15 is one of the lowest rates. it has gone to the 14 level but is still exceptionally low, the volatility index. perception from the volatility from the vix is smooth sailing despite the fact we have these bumps in the road to mix
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metaphors. liz: natural gas futures closed sharply lower as traders took profits and forecast milder weather. dave: earnings season is in full swing. we are about to get the results from microsoft and capital one, what a big day. google reporting a surprise earnings miss. we bring the earnings conference call and hopefully larry page will be on it. even if he has a sore throat. that begins in 28 minutes from now. liz: can't wait to hear what happened but whatever numbers came out early they were correct numbers. we will talk to former intel ceo and chairman craig barrett who will tell us why education is the biggest problem this nation is facing and what his solutions are for getting back on top. dave: we have the numbers on microsoft. what are they? connell: coming in at $0.65 with the street expecting $0.65 on
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revenue line they miss at $16,010,000,000. the street was expecting $16,420,000,000. this is a big buildup for next week. microsoft is unveiling windows 8. there's a lot riding on this. adjusted earnings per share $0.65. the street was expecting $0.56 and the stock is up 1% in aftermarket trading, revenue $16,010,000,000 industry expecting $16.4 billion. liz: a 9% increase from the year ago period, online services, that division reported revenue of $697 million and there you go, and 9% increase and also looking at some flashes on windows 8. everyone is waiting for this to generate, but q 1 revenue deferred for windows 8 presales and office offered at $1.3 billion. >> i am trying to read through this thing right now.
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i am getting stuck. the cash equivalent is $5.4 billion. we haven't got the full release yet. dave: we don't know what is going to happen but intel and ibm, right after earnings came out they missed, didn't look so bad but the next day they were down 5%. you have to take these things in stride. surprisingly missing earnings, they look about even with where they ended the day. liz: we have kyle harrington telling us why he is bearish on this market and breaking down google's earnings and gets you ready for microsoft, at let's check in with scott at the cme. what was it like when the google news hits?
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>> half of the pit was at lunch so when the news started filtering out, there was quite a buzz going on. all of a sudden everyone said google traded 700, below 700 because it was not a magic number in terms of support line but the round number. what is interesting is the thought really would have been earnings were not leaked and they came after the close with only the after-hours market open. everyone would have thought google would have traded a lot lower so being down 8% is a big move that in the grand scheme of things it is really not. what i want to touch on is the point you talked about a few minutes ago. even with the big google drop and the rest of the market, the tech market taking it on the chin. the vix is unchanged. dave: we had to pull the numbers
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out. what are they? >> earnings per share coming in at $2.27, revenue picture, $700,500,000, the street expecting $2 million and shares trading down since this came out roughly 5% in after-hours trading. dave: what happens after hours is not indicative of what happens tomorrow but we do see a big hit after hours on chipotle as a result of these earnings. do these after-hours numbers stick? >> i would have said if there was an earnings miss, 275 with a number to look for. that was a good support area. we have reached that. we will trend back to that arianna and back off of that. that first knee-jerk reaction when you reach a major support or resistance level is usually pretty correct. i wouldn't doubt if we trend
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back 275 and full back to this area. dave: you will say in play but we will bring in some other experts and we have kyle harrington and jack gold, principal analyst. i want to go to you first. let's talk about google because it is the story of the day and mobile adds, the question of cost per click played in to what happened to google. they're getting 15% less than they were a year ago and 3% less than last quarter and they say mobile labs don't pay as much. as people move from pcs to the mobile units whether it is their iphone or tablet people have to figure out how to make money on mobile ads and they haven't done it. >> i agree. is the problem. there are some many mobile users out there. the world had a billion smart phones. that is a big number. if you can't generate the same
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amount of revenue on a mobile phone that you cannot make pc then ultimately profits go down. google has to figure out how to do more with less. smart phones don't pay as well. i am not willing to collect on them because they get in my way when i am on my smart phone and so google has to come up with some way to get me to either click more often or generated-revenue they're not doing today. liz: broadening the picture from just google, this is sort of individual at the moment of the when you look at the entire market and these things don't help the picture at all what is the biggest fear when comes to what is happening with equities? >> you are seeing microsoft revenues and google revenues and they are down and this is exactly what i would have thought. i am not right all the time but in this earnings season i think i am right and what you are
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seeing, the biggest thing is the labor market. it continues to be the biggest thing domestically. when people are not going back to work we saw the jobless number giving an indication what the unemployment market will look like going forward. people are not buying smart phones and there are billions smart phones in the world that looks like there will be another billion sold. as of right now when people are not working or going back to work you are going to see sales slide. dave: you say you are a bare but you are 70% equities. that is pretty bullish for of bear. >> when you are thinking long term lot of folks we represent manage money for we are putting together portfolios based on long-term horizons. not with any year but three years out. we will position areas we think are the growth engines of the united states, which is tech and biotech. we are going to look at
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companies that trade -- [talking over each other] >> trades in a liquid fashion at $16 billion from the balance sheet with 3% dividend yield. that is a company we are going to hold long term. in the short-term this earnings season continues to have dismal revenue growth and that is what we are going to focus on because western europe's demise in the unemployment market here. liz: you mentioned in tell. we have a former chairman craig barrett who had run the company for many years and he is here with so much to talk about. where do you stand on this and what is the best way to make money with the way you are viewing the market? >> we have to look at this from a long review. in the short-term there will be a lot of volatility. the markets will go up or down. the economy may or may not do better depending who gets elected. all, we what we need to look at from a google perspective and microsoft perspective and intel perspective is where is the market going?
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how are we transitioning? we are moving from a fixed market place where people buy lots of pcs or sit at home all the time looking at their tv sets to one where we are mobile. dave: we have a slight correction that has come in on microsoft. what is it? >> the adjusted revenue picture. seventeen.four billion. here is something interesting as we report this to you. according to the earnings report the windows 8 presales revenue is 40% higher than windows 7 in the comparative launch quarter. you can see liz was talking about a lot of build up to next week. robert gray will be there when they launch windows 8 but the adjusted revenue is $17.4 billion. dave: the number they are expecting, this could be a turnaround for microsoft on the
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plus side. >> windows 8 is a huge bet on microsoft's side. that is their way to get into the mobile space. windows 8 is the next version of an operating system may have to get the next four billion people and if it doesn't succeed, if it doesn't do well in the mobile space on tablets or smart phone they will hurt longer-term. i would be cautious around windows 8. we have to take a long-term view of this. in the short term unless you are buying a new pc and it has a touch interface there's not much reason to buy windows 8. enterprise's businesses -- liz: they are building it in. hewlett-packard is having people buy stuff now and saying we will reimburse you for any upgrades. who wouldn't if they have the money and are waiting wait to have that touchscreen so it makes it feel like the ipad and a lot of these are convertible and the screen snaps off and becomes the pad and become more
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of a pc or laptop? what is your best bet right now? where are you putting your client's money and what is a real opportunity no matter what a weak earnings season we have? >> we will get defensive and go to liquid names like johnson and johnson and focus on the biotech arena with those that paid 50 years in a row increasing dividend and have cash on the balance sheet and get protective and own names like kimberly clark, the product you would recognize as kleenex. those products are going to continue to be needed in the economy day today regardless the unemployment marketplace and what happens in western europe and we will stay saves going into the election season because i believe this election is one of the most important elections in the united states in my lifetime. dave: johnson and johnson a huge run up,%. very unusual for a stock like j and j which meanders along. it is popular over the 70 mark.
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let's go to scott power. intel and ibm and apple all had problems over the past few days. their stock -- is this a trend or is it a midseason shakeout we are seeing? >> i will be honest. i will take the contrarian role and say a midseason shakeout. people are having the opportunity now to reload these stocks. people who did not get in in the big rise over the last six months will funnel into the marketplace and as long as we don't continue to get this awful guidance and start to see sales and revenue stay stable when the stocks back off 10% or 20% like we are seeing, that is the place to get in. dave: kyle harrington, see you in a few minutes when the s&p futures closed. breaking news. thanks very much. liz: we are 16 minutes away from that earnings call, the
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explanation from the ceo of google, 14 minutes away. google's earnings hitting the tape after midafternoon and a surprise to all the earnings, that conference call 4:30 eastern. we will bring that to you live to hear what he has to say. stuart: to one of the biggest problems is dwindling educated work force. how did we keep this country's brain drain from stopping? has to reinvigorate these companies. craig barrett is on the case telling us how to fix our education system and what does he think of google's big miss. liz: their stock is seeing the biggest jump since march. the nation's seventh largest bank finding a lot of love from investors. what is the key to their success? a fox business exclusive. beth mooney is the ceo, joining us live. [ male announcer ] this is steve.
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copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. liz: s&p futures just closed. let's go to scott bauer for reaction. >> in general the s&p closed on
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a calm note on a flat level. all the excitement is about google in ten manhattan looks like microsoft. when the news came out we saw microsoft kicked up. now that the news is being digested and revenue number had some discrepancies now that people are understanding what the level it is approaching at 2870, major support level. we should see a lot of fires coming in there. liz: good to see you. dave: san disk reporting third quarter earnings and did so moment ago. let's go to nicole petallides. nicole: let's take a look at sandisk. we're looking at revenue and profit, topping analysts' estimates, strong retail -- step away from this it is a little bit wow. when you look at sandisk is looking a little higher. the flash memory card business is all about data storage, calif. tech company and it
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halted in the after-hours. this is the stock that is down 13% but analysts are talking about the fact that the recent inflexion we have seen should result in good news here for sandisks so we will follow and it is looking like is moving to the upside and directly correlated with sales of smart phones. the more smart phones are sold that does well for a name like sandisk. dave: a rise in income for the third quarter thanks to fees and interest on loans and stock was rising as a result. the ceo beth mooney on where the bank is cutting costs and where they are expanding. liz: former intel chairman and ceo craig barrett on one of the biggest problems facing technology today. it is an ill educated work force in the u.s.. google, the call in ten minutes. you cannot afford to miss a minute of this show and we will take that call next.
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dave: third quarter earnings beating street estimates on the top and bottom lines. liz: stock is rising. everyone else was getting traumatized over google this stock jumped 4%. what is behind better than expected report and, as the company looking forward? joining us with an inside look, beth mooney, chairman and ceo and president. i was with you in cleveland. looking at this third quarter report i am more interested in the bigger picture, the nation's seventh largest bank. we also heard mortgage rates were dropping once again.
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what will that do for your business? >> the strength of our quarter was based on our ability to grow revenue from lending activities as well as our loans and deposits were far more robust and expanded net interest income. mortgage rates are going to not be as big a driver. we are more a commercial and middle-market and small-business lender and we are getting most of the growth out of our business clients more than our mortgage client base. dave: you just reentered the credit-card business and a lot of people are complaining it is not what we were hoping it was. what is your experience wiih credit cards? >> credit cards, we recently re-entered credit card by acquiring our own client base, $725 million of key clients and credit cards. was an opportunity to expand our product offering bringing those important clients back in and
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making sure we could get attractive client economics, expand our product offering and control client experience. we are excited at the opportunity. dave: is the too early to tell if it is meeting expectations? >> too early to tell that this is a portfolio of our clients. this is the accounts and their spending patterns, something we are familiar with. too early to tell what it looks like on our balance sheet. liz: interesting you talk about our it is enterprise and the business and customer from the business world. what are you hearing from them? what is it like for the business world? >> a lot of talk about that in this week's earnings because there's a sentiment of caution among businesses. the fiscal cliff, the debt ceiling and terms of the election and what happens with taxes. we are hearing that caution and sentiment of concern from our business client but from the other hand they will make a move
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to acquire property plant equipment and do mergers but do it with caution, they need strong economic reasons. part of the reason we are seeing growth is we are acquiring market share. dave: you may be moving from the mortgage business but your active with fannie mae and freddie mac. what do you think of those companies? some say they need to be broken off and sold off. >> there has been a lot of dialogue and debate among pundits and the washington what to do, a lot of minds will look at how we should approach g s c reform. we are a seller, three quarters of our mortgage production we do sell and keep a quarter in our balance sheet. dave: best mooney, congratulations, break reporting, ceo and president -- liz: up 23%. after the break google will hold its earnings conference call following the huge third quarter
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myths and the drama about the early release of earnings. bringing you google's call live next.
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david: it is time. 4:30 google conference call is about to start. they have music. we're following the feed. adam shapiro has been following the for us all today. we'll go to adam. this will be a analyst report. larry page ahead of google will answer questions from analysts right? >> you will hear larry page reiterate the revenue being up what was it, 45% they were talking about but there will be key questions about the revenue picture. they will separate questions about motorola's revenue and misses with motorola and was it wise for google to take on a hardware company. you will have a lot of questions about google's revenue picture on ad advertizing and what is happening but get more clicks but make less money per click going forward. liz: the call is beginning but just the preamble where
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they put in a bunch of legal mumbo-jumbo. they announce larry page will be on the call. if we anticipate what analysts will ask, it will be how can you not telegraph there were bigger problems than the street was expecting from motorola mobility? they acquired that company as a patent mine. they thought they would mine the patents and get hardware for a phone, is that right, adam. >> that's right. there will be a lot of questions about motorola. at the end of the day google has gotten into a huge fight with apple because of their plans regarding android operating system and their movement into mobile delivery devices. they see it as their future. there is pain right now. pcs will in the ever go away but pcs are getting behind us. pcs are the past. google has to make the move some analysts believe towards motorola. they have to take less money for a click or view on advertising page when you're on your cell phone.
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these are the kinds of things you're going to hear larry page saying. we have to do now as to grow the company forward. david: $527 million operating loss, motorola is albatross. they have a lot of explaining to do there. they have to explain the cost per clicks. this is way down. 15% over last year. 3% down over last quarter. cost per click is a real concern as we as a nation, and the world begin to move from the pc to mobile devices which don't sell ads as well. >> when you talk about cost per click a very simple way to appreciate the real hardships that companies, even strong companies --. liz: hold on, adam. the call is beginning. let's listen to larry page. >> hello, everyone. thanks for joining us. it is great to be on the call today and share our progress since we last spoke six months ago. as you can here my voice is still hoarse so i will keep my remarks reasonably short. i'm sorry for the scramble earlier today. as our printers have said,
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they had sent out the release just a bit early. we had a strong quarter. i'm really happying with the our business. revenue was up 45% year on year. hand at just 14 years old we cleared our first $14 billion revenue quarter, not bad for a teenager. today we live in the world of abundance, abundant information, and abundant computing. most of us carry at least one device. all the time, every day. in fact, many of us feel naked without our smart phone. our surprising mobile search queries and mobile conference are growing dramatically across the world. when we use these devices interchangeably, depending on our situation, i switch between my nexus phone, 7
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tablet and my new chrome book we announced today, many times every day. all this abundance causes disruption and also creates amazing opportunities. google is super well-placed to take advantage of these disruptive opportunities. why? because our search query volumes have grown this quarter as measured year-over-year. and we're seeing tremendous innovation in advertising which i believe will help us monetize mobile queries more effectively than desktop today. indeed, our mobile monetizaton per query is already a significant fraction compared to desktop. in short, as we transition from one screen to multiscreens google has enormous opportunities to innovate and drove ever
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higher monetizaton just like search in 2000. we took a big bet on android back in 2005. we believe that aligning standards around and open source operating system would drive innovation across the industry. most people thought we were nuts. today there are half a billion android devices, half a billion, with 1.3 million more being activated every day. you should all run out and by the next 7 tablets for $199. we have had rave reviews and recently won gadget of the year from t-3, the gadget experts. we love the tape graduation with google play. it is an amazing device. this time last year i announced that our run rate
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for mobile advertising hit $2.5 billion. that seemed like a pretty big number, even for google but now when we built up additional mobile revenue from users paying for content, and apps and google play. including these new sources grossed up i can announce our new run rate for mobile as now over $8 billion. that's quite a business. we have some opportunities today unless we prioritize, we spread ourselves too thin. last month we sunset another 19 products. we have now closed or combined 1 of products and features in the last year. and we put a ton of energy into insuring that our remaining products work really well together.
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because as screens multiply, it is more important than ever we converge our services. users want one consistent, beautiful and simple mobile experience. technology should do all the hard work. integrating users to get on with it the important things that matter in their lives. screen independence is at the core of our strategy. take chrome and android for example. we only launched in february, but the experience is already amazing. when you're using chrome, switching devices is truly painless. all your tabs there, ready to go. search on your desktop and the result is right there on your smart phone. you click the back button and it works. as more users upgrade to google plus, it is now over 400 million, users enjoy
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amazing experiences across devices like instant photo upload. in the same way we want to make advertising up super simple for customers. online size advertising has developed very device specific ways. separate campaigns for desktop and mobile. this makes us the choice for advertisers and ad agencies and mean mobile, it means, mobile opportunities often get missed. while we're working to significantly simplify the campaign experience, working very hard on that. advertisers should be free to think about their audience while we do the hard work of dynamically adapting their campaigns across devices. i'm very excited about this. i talked to at the start about the abundance of
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information. in the early days of google you would type in a query, would return 10 bluelinx and you move on fairly happily. today you expect more. you expect google to understand deeply and you expect us to turn your intentions into actions in the blink of an eye. you search for tom hanks movie, chances are you want movies with tom hanks. thanks to our knowledge craft, that's what we show now. right from the results page, clean, fast, and organized. and if you're shopping, say, for ugg boots we now give you pictures, details about the different boots, prices and information about the local inventory right from the results page, clean, fast, and organized.
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there's much more we can do to get you the right information at just the right time. you might have a really important event in the city, perhaps, a first date. and the traffic is bad, you need to leave early, to avoid being late. or maybe you're just landing in a new country and you're at the airport atm, trying to figure out how much cash to withdraw. google now which we launched on android in june gives you all that information and more automatically with zero effort required on your part. the early days these kind of tips and recommendations are superpowerful. they really save users time and hassle. this is why i'm incredibly excited about the opportunities ahead, given our expertise in search and
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mobile, and our track record, mon advertising high usage -- monetizing high usage products. every day i wake up and i'm delighted that our opportunities keep growing and that were birthing to our users great products that are defining the future. it's a truly exciting time to be at google. and now we'll hear from patrick some details about our quarter. >> thanks, larry. good afternoon, everyone and thank you forring us. overall we're very pleased with the growth trajectory of our business this quarter and this in fact, despite significant currency fluctuations in many of our international markets. so, for example, if currencies had remained constant year-over-year, our consolidated revenue growth would actually have been 6% higher. on a positive note our u.s. growth continues to be strong and as larry noted, we had a great quarter on
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the product front gaining traction in a number of critical areas. so before i dive into the financials i just want to give you a bit more detail on the new $8 billion annual mobile run rate larry mentioned. the run rate is different than the one we gave you a year ago. more specifically last year it included only our gross revenue for mobile ads but this year in this new number we also added the gross revenue from the mobile sales of google play content and finally it also includes the consumer spending on the play apps. so with that, and now why don't i just jump into our financial performance. our total gross consolidated revenue grew 45% year oaf year to --. liz: that is the chief financial officer speaking on the call. when the analysts for jump in for questions we will also dive back in larry page a very hoarse and haltingly speaking larry page, saying in essence i'm sorry about
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the scramble, referring to the early prerelease earlier today that was a surprise. it really shock the markets. printers, r.r. donnelley, released it a bit early. that is the only comment he made about that. he moved on to say the business looks very good but just from their mobile business alone they're making $8 billion. david, i'm wondering if the headline will really be what is really wrong with larry page? david: you feel for the guy. whatever he is sufficientinger from is very severe, severe throat many pro. he missed the last conference as well. people were thinking if that is temporary he will be in full voice for the next one. not so. he still has severe problems. that may be particularly what we went through with other companies whether the ceo is seriously injured, whether they have to divulge what his medical problems are. that may be become part of about, the problems with motorola, that $500 million problem motorola is having
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and whether they're a drag on the company but secondly the pay per clicks is probably the more fundamental problem. how you begin to get money from the world's switch from the pcs to the mobile devices and again, it is hurting their bottom line. liz: remember, the earning they missed on both the top and bottom line and he reflected none of that. as david mentioned motorola mobility, wouldn't even give a nod to that and talk about it? he only said very positive things. there are great stories here. the android device numbers are stunning. 1.3 million of them activated every day. he is big on smartphones. guess what, intel is inside many different deis haves, a lot of the internet and they are now broaching into the smartphone business. speaking of which the chairman, former chairman and ceo craig barrett joins us live, next [ male announcer ] how do you turn an entrepreneur's dream... ♪ into a scooter that talks to the cloud?
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whatever your business challenge, dell has the technology and services to help you solve it.
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liz: breaking news, the google ceo larry page saying about the early release that was inadvertent of the earnings for google, i'm sorry about the scramble. our printers released it a bit early. now "the wall street journal" is reporting that those printers, r.r. donnelley, are admitting it was a human err.r. the ceo telling the journal, human error caused the early release. you know these things in the grand scheme of it not the worse thing in the world t shocks the market and people were not prepared for it.
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the stock of google took a hit. r.r. donnelley ended up not too badly but in after-market the bid is a little lower than the actual closing value. not so for google which still struggled in the after market session as the call continues. let's get to somebody that knows a lot about technology and the internet. craig barrett is former intel chairman and ceo. craig, you join us on quite an active day. what do you think of all the drama that happened with google? >> you have great stuff working. presidential debates, google, microsoft, intel, ibm. lots of activity. liz: intel of course is the focus of your world or had been when you were chairman and ceo for many years. just quickly as we talk about the business and then we'll get to your education ideas, one of the things that larry page of google just said many of us feel now naked without our smartphone. devices are now interchangeable. it is a huge business for he will this. does intel really need to step it up to get into at
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that business? we have spoken with the kfo and ceo on many occasions but if you were looking at overall industry, what is the trend for the future? >> i think the trend is pretty much as people have seen it for many years. there are three different size factors for devices. the one we're on today, which is the big screen, sit back and look at it. there's the pc which is interactive digital device. you create content, you manipulate content. there is the handheld device. you want all three of those to be interchangeable, interactive and move seamlessly from one to the another -- other, much like larry was talking about in his comments. >> craig, this seems to be a seismic shift, one we have every five or six years, maybe longer than that as we shift from the concept of what a pc is. again we're here to talk about education, whether as a country we're educated enough to deal with the information revolution we're in the midst of, but, does there need to be a education
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shift within companies like intel to sort of readapt to the situation of maybe eventually a world without a pc?% >> well, i think what you've seen intel doing, which is historically the pc was a desk top device. then it went to laptop. now it is to ultrabook or tablet or those ultrathin form factors. people are talking about those over a decade ago, within intel and, what the trend lines were. and you've seen intel work to get thin lined profiles, lower power consuming devices. those also go into smartphones as well as to the tablets or ultrabooks. i think they're doing exactly the right thing and in moving forward. they're moving into handheld devices with really offshoots of the x-86 architecture is exactly the right thing to do as well. liz: stacy smith told us there are 20 tablets out intel is inside. he is very excited about that.
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as we watch that, it leads to the question, hiring smart, high school and college graduates to work at places like intel. you know, you need pretty high iqs or people who understand engineering, what is the flaw in our educational system here in the united states that we absolutely must fix, that prevents united states children from jumping into engineering or really wrapping their mind around it? >> the basic issue we need to do a better job in the k-12 area of mathematics and science. that is really the achilles' heel of the u.s. education system. our universities are still top of the world. our university graduates are the people that everyone in the world wants to hire. the promise most of the engineering graduates in our universities as you know were foreign nationals, they are not u.s. citizens. we have immigration problem it hire them. but the fundamental problem to get our kid better at math and science in k-12 so they appreciate and love the
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subject material and then they will main nor -- major in engineering and science when they get to the university. it is a k-12 problem, not university problem. david: interesting you say that, because some of the smartest minds in economics agree with you. milton friedman. teddy forstmann, a whole slew of cop class business and economic mind got into this saying it is k-12 but of course the problem is, the competition that things like charter schools provide that might give us the competitive edge are so, battled against by the traditionalists, particularly the teachers union and whole public school system. is there a way to get a compromise to work so we get a more competitive system from k-12? >> you've got some good momentum in a few areas. you mentioned charter schools. roughly 40 of the 50 states have laws for charter schools. a lot of them need to be more liberal like those in
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arizona and a few other far-thinking ahead states, but you need that competition to move the public sector. you know, we've done detailed studies of the k-12 education system in the u.s. for over 50 years. the, you go back to 1958, right after sputnik went up, pursuit of excellence was published how to reform k-12. every study since then for the last 55 years has said exactly the same thing. you need well-educated, content expert teachers, you need high expectations and need tension, read that come testing in the system. pay for performance. alternative education like charter schools, that sort of tension. we've known that for over half a century. and the bureaucracy of the system has fought against those systemic changes that we need. you're starting to see more charter schools. you're starting to see this
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thing called common core curriculum. 46 states signed up to implement a higher level curriculum in the language arts and mathematics and science. we've also seen most of the states sign up to a new assessment tool so that we can compare our children to their international pierce in mathematics and science around the world -- pooerz. we. liz: we have 20 seconds here do you still believe in the mow hundred tum here in the u.s.? >> i wouldn't being talking if i didn't believe in hope. arizona charter school called basis. a couple of the best schools in the united states. i see it can be done the place to go for the action is competition. david: craig barrett.
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melissa: i'm melissa francis, here's what's "money" tonight. google takes an epic face plant. its earnings leaked early by accident. the tech giant misses estimates by a mile. we've got breaking details just how bad it could get. plus president obama and mitt romney trading blows over coal. robert murray, ceo of coal giant murray energy is here in a fox business exclusive to tell us who he thinks is really a friend and who is a foe. two syrian oil and gas pipelines are blown up near the

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